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The Growing Impact of Truck Parking Shortages on the Economy and Communities

09/21/2023 18:31

Truck parking shortages have been a growing concern in the transportation industry in recent years, with a significant impact on the economy and communities. The lack of truck parking that is safe and adequate parking spaces for commercial trucks has resulted in drivers resorting to parking in unsafe locations, such as on the sides of roads or in residential areas.

This not only creates safety hazards for drivers and other motorists, but it also causes inconvenience and disruption for local communities. Moreover, the economic costs of truck parking shortages are substantial, with delays, decreased productivity, and increased operating costs for trucking companies. Additionally, the shortage of truck parking spaces contributes to the worsening of the truck driver shortage crisis.

Safe truck parking issue or safe parking issue is really a concern.

Is there funding for truck parking to make major freight corridors safer? What are the current truck parking projects of the Departments of Transportation? 

The issue has become so critical that several industry stakeholders and advocacy groups have called for more attention and investment in addressing the problem.

This blog post will provide an in-depth analysis of the impact of truck parking shortages on the economy and communities, including the potential solutions and initiatives that are being implemented to address the issue.

Why Truckers are Footing the Bill for Parking – and What Can Be Done About It

Henry Grabar, a journalist, once subscribed to a news alert for "parking conflicts," assuming he would receive jaw-dropping stories about suburbanites fighting for parking spots and communities arguing over availability. However, he discovered something unexpected: the difficulties faced by truck drivers. In his book "Paved Paradise," Grabar argues that Americans have allocated an excessive amount of space and resources to residential parking.

He highlights that unlike the majority of us who complain about parking, America's 2 million long-haul truck drivers face genuine challenges in finding suitable parking spots.

The Cord Distinction

The difference between truck parking and car parking is that car parking is mandated by law in most jurisdictions for various land uses, whereas truck parking is generally unwelcome in residential areas. A recent study by the American Trucking Associations found that truck drivers spend an average of 56 minutes per day searching for parking and that there is only one spot available for every 11 truck drivers.

Furthermore, the implementation of the electronic logging device mandate in 2018 has exacerbated the problem, as truck drivers are now required to complete all of their driving within a 14-hour window. Over the past decade, the number of miles driven by freight trucks has increased at a faster rate than the number of public and private rest stops, according to the Department of Transportation.

This means that even as truck drivers play an increasingly important role in the American economy, they are not receiving adequate support in the form of adequate rest-stop facilities.

Truck Parking is a Major Concern

Finding a safe and secure place to park a grain truck is a major concern for drivers like Mike Nichols based in Wisconsin. This often leads to situations where they feel like they are almost homeless, especially when they are running out of hours and unable to find a suitable spot to park. When forced to park on an on- or off-ramp due to a lack of options, drivers face serious challenges as there are no bathroom facilities available. This poses a significant quality-of-life issue and highlights the urgent need for better parking facilities for truck drivers.

Parking for truck drivers involves more than just finding a spot to park their vehicle. It is a crucial aspect of their daily routine as they need access to facilities like restrooms, showers, and dining options. Security is also a priority and drivers look for well-lit areas with fences and security personnel. However, finding such amenities has become increasingly difficult and expensive, with charges ranging from $10 to $50 per night. This recurring expense can be particularly challenging for small businesses operating on thin margins in the trucking industry.

Although public rest stops offer free parking, they typically lack basic amenities like showers and fresh food.

Finding Safe and Suitable Parking Locations

The current situation for truck drivers has proven to be quite challenging, as they are not only tasked with transporting essential goods such as food, clothing, and medicine but also with finding safe and suitable parking locations. Many drivers have reported resorting to parking on the shoulders of highways or abandoned lots, which can pose significant safety risks.

Tragically, this issue has even resulted in fatalities such as the case of Jason Rivenburg, a truck driver who lost his life in 2009 after being forced to park at an abandoned gas station. As a result, it is crucial that adequate parking options be made available to ensure the safety and well-being of these hardworking individuals.

The Primary Goal of this Legislation

In response to the tragic and unjust killing of Jason Rivenburg, the U.S. Congress passed a law known as Jason's Law. The primary goal of this legislation is to address the issue of insufficient truck parking facilities across the country. To this end, lawmakers have proposed a bill that would allocate a significant $755 million toward the construction of new truck parking areas.

While this bill has been introduced and reintroduced several times, it is important to note that its passage is not guaranteed. According to GovTrack, a nonpartisan organization that monitors legislative activity, the bill currently has a 35% chance of being enacted. It is therefore uncertain whether this funding will ultimately be granted, and those who depend on safe and adequate truck parking must continue to advocate for their needs.

Developing Applications to Connect Truck Drivers with Available Parking Lots

Entrepreneurs have taken notice of the shortage in truck parking and are quickly stepping in to fill the void. In my recent discussions with six such individuals, I learned that some are focused on developing applications to connect truck drivers with available parking lots, while others are purchasing local lots and transforming them into designated truck parking spaces. Additionally, I had the opportunity to speak with three investors in the logistics industry.

These conversations have raised questions about who should be responsible for addressing the truck parking shortage. While a private-public partnership could be a viable solution, securing funding for such an initiative has proven difficult. Furthermore, some may question the ethics of private businesses outsourcing a business expense to the public. It's worth noting that pilots and flight attendants don't receive taxpayer-funded hotel stays while away from home.

Despite these concerns, ensuring that truck drivers are well-rested is crucial for public safety. As freight economist Sebastian Guerrero has pointed out, it's in everyone's best interest to address this issue.

Trucking is a critical industry that employs a significant portion of the labor force. Goods and products are transported by trucks, often multiple times, making it a vital part of the economy. Unfortunately, the issue of truck parking remains unsolved, posing a challenge to the industry.

Truck parking is a crucial aspect that needs to be addressed promptly, and the current approaches are inadequate in resolving this matter. It is essential to find a viable solution to ensure the smooth operation of the trucking industry and the economic growth it brings.

Parking Profits: How Clear-Eyed Truck Entrepreneurs are Revolutionizing the Industry

During my research on truck parking, I had conversations with six entrepreneurs who are involved in this industry. Interestingly, most of them did not possess any background in the trucking sector. However, I believe that their unbiased perspective can help address the issue of inadequate truck parking, instead of accepting it as an inevitable problem.

Furthermore, other entrepreneurs in this field are taking a different approach by purchasing or leasing their own lots and developing them according to their requirements. An example of such a company is Realize Truck Parking, which operates three truck parking lots across the country. Cody Horchak, the founder and CEO of Realize, mentioned that their Las Vegas lot is usually sold out every night, despite charging $35 per night, because it offers amenities that are not readily available in the trucking industry, such as stadium lighting, showers, and security.

Horchak also shared that his company is exploring the possibility of providing a team of masseuses in the future for their existing and upcoming lots. 

The Solutions that Address the Truck Parking Shortages

As the transportation industry evolves, innovators are creating solutions to address the persistent issue of truck parking shortages. One such solution is the development of mobile applications that connect willing lot owners with truck drivers in need of parking accommodations. For instance, Truck Parking Club, founded by Evan Shelley, has already facilitated thousands of bookings across 155 locations nationwide since its launch last year. The app allows drivers to easily browse and book parking spots, while also providing information on nearby amenities like repair shops and security guards. Another new app, FinPark, has already gained traction in just three weeks since its launch as part of the Canadian freight services firm Finloc 2000. With over 250 locations already listed, the app is rapidly gaining popularity among truck drivers in need of reliable and accessible parking options.

Unclear Busines Model

During my conversations with various entrepreneurs, I discovered that despite being relatively new, their platforms had already experienced significant growth. These individuals exuded confidence in their businesses and expressed a long-term commitment to their ventures. However, I couldn't help but be intrigued by the economic factors driving these businesses.

In an effort to gain further insight, I reached out to several investors who specialize in this industry. I was curious to know if they had any involvement in truck parking, but their responses indicated otherwise. Despite the rapid growth of these businesses, it seems that their market niche is not yet of interest to investors in this particular space.

According to Santosh Sankar, co-founder of the venture capital firm Dynamo Ventures, there has been a noticeable increase in the number of truck parking companies in recent years. However, he believes that private equity and real estate are better suited to back such businesses due to their high capital requirements. Sankar and Wesley Friedman, principal at venture capital firm 8VC, both agree that while they see potential in companies that address the issue of truck parking, they are not interested in investing in firms that are primarily focused on real estate.

They believe that such companies would not generate venture-scale returns and are more akin to a real estate investment with some technological integration.

Economic Based Marketplace

Friedman has suggested that the economic viability of a marketplace-based application has reduced in recent times. It is no longer sufficient for an app to simply accumulate a significant user base, but rather it needs to find alternative methods of revenue generation. This could be the reason why there has been a noticeable increase in digital freight brokerages offering financial services. These platforms have realized that diversifying their revenue streams is essential for sustainable growth.

Friedman, a spokesperson for the company, revealed that they tend to focus on developing software with a marketplace component, rather than simply creating pure marketplaces. Nonetheless, they have invested in pure marketplaces in the past, provided that a compelling argument is made for its existence. The company constantly challenges themselves to explore what is now possible with technology that wasn't achievable five years ago.

Conversely, entrepreneurs interviewed stated that they chose to self-fund their ventures or seek private investors, with some declining venture funding offered by VCs.

The potential profitability of truck parking is yet to be explored, according to Andrew Jones, a regional manager at a prominent self-storage company. Having recently ventured into this area, Jones believes that truck parking is a need-based business and could be as lucrative as the self-storage industry was in the 1970s. Unlike other popular asset classes in real estate, truck parking is not as well-known and requires a private sector approach to maximize its potential. Individuals are willing to pay for parking their trucks, and the private sector is best suited to cater to this need. The public sector is unlikely to recognize this opportunity.

Are We Doing it Backwards? 

Truck parking comes at a cost, and it is not free. Providing necessary amenities such as security, paved lots, and restrooms with showers requires investment. Currently, this expense is predominantly borne by truck drivers who earn a median annual salary of just under $50,000. While we wait for solutions from venture capitalists, private equity firms or the government to alleviate our truck parking challenges, some experts suggest that the responsibility for paying for parking should fall on the trucking companies themselves.

The notion that parking should be free is a common assumption, but the reality is that constructing parking facilities can be quite costly. According to Grabar, there is currently an argument being made that the federal government should take responsibility for this issue due to its impact on interstate commerce and highway safety, particularly since a significant portion of goods transported in the United States are carried by trucks. However, a valid question to consider is whether enough parking will actually be built if nobody is willing to pay for it. This lack of incentive may discourage the construction of new parking facilities.

The Alternative Solution

An alternative solution for addressing the issue of limited truck parking space is to have the retailers and manufacturers bear the cost. However, the feasibility of this option is questionable given the likelihood of trucking companies being abandoned by their customers should they raise their rates to cover the expense.

The highly competitive nature of the $875 billion trucking industry, as described by University of Pennsylvania sociologist Steve Viscelli, exacerbates the situation, with many fleets engaging in a "race to the bottom." Unfortunately, the industry is currently facing significant challenges, with notoriously low margins and a high number of fleets shutting down due to falling pay and increasing costs.

The truck driving industry is not only crucial to the livelihoods of the 1.8 million drivers across our nation, but also has a significant impact on road safety. While the exact number of truck crashes caused by inadequate parking options remains unknown, it is reasonable to assume that there is a correlation.

Truck drivers who are preoccupied with finding suitable parking, rest and food options are likely to experience increased levels of stress and fatigue, which can compromise their driving abilities. The Department of Transportation has emphasized the importance of ensuring truck drivers have adequate rest to maintain a safe and efficient supply chain.

In Conclusion Concerning Economic Impacts 

The growing impact of truck parking shortages on the economy and communities is a complex issue that warrants attention and collaboration from all stakeholders involved.

The shortage of safe and secure truck parking spaces not only affects the trucking industry but also has ripple effects on the supply chain, public safety, and the environment. The challenges of addressing this issue require innovative solutions, such as the use of technology and public-private partnerships, to improve the availability and accessibility of truck parking spaces.

By working together, we can mitigate the negative impacts of truck parking shortages and ensure the continued growth and prosperity of our economy and communities.

If you want to stay updated with a wide range of trends, actionable insights, and innovative solutions in the trucking, freight, and logistics industry, stay connected to us.

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